Warren Mayor Fouts, aide get wrist slap for fund-raising violation

Warren’s annual state-of-the-city speech in 2016 certainly looked like a city function – touted in residents’ water bills and on the city’s cable-TV channel, staffed by city employees and police officers – but actually it was a fundraiser for Mayor Jim Fouts’ political action committee.

That’s the finding of state election officials after a two-year investigation that ended in a mildly worded letter of reprimand sent this month to Fouts’ attorney.

Secretary of State election officials said they'd drop their investigation if Fouts’ public services department director Richard Sabaugh, who organized the fundraiser, reimbursed the city for “approximately $761.90 of city funds spent to advertise, market, promote and staff the PAC fundraiser.”

Fouts insisted Wednesday that he’d had nothing to do with organizing the fundraiser.

“This was all done by Richard Sabaugh and he has admitted that. When I approached him about this last year, he said, ‘I accept full responsibility.’ Sabaugh is writing out a check and giving it to our city treasurer” on Thursday, reimbursing the city and sending proof of that to officials in Lansing, Fouts said.

According to the letter from the state’s Bureau of Elections, those actions will resolve the complaint and eliminate any need to submit it to state prosecutors.

“I hear Drolet is beating on his chest about this,” Fouts said, referring to Macomb County Commissioner Leon Drolet, who filed the complaint on behalf of an anti-tax group. Drolet is chairman of Michigan Taxpayers Alliance.

"This came on my radar” because Fouts and his associates used tax dollars to promote a political event, Drolet said. Although he lives in Macomb Township, Drolet said Wednesday that his tax-fighting group has members in Warren who brought the campaign-finance issue to his attention.

"Mayor Fouts has been found guilty of using taxpayer resources for his political purposes and I do feel vindicated. But this fine doesn't come close to covering all the city staff time Fouts abused," he said.

In his complaint, Drolet alleged that Fouts’ campaign treasurer filed a quarterly campaign statement for the committee showing that $20,510 was raised by the speech – on April 7, 2016 --- and that it paid $8,652 for banquet hall services to Andiamo Banquet Center but neglected to report the event to state officials as a fund-raiser.

The statement said that 472 people attended the event, paying $40 per ticket, or $50 for seats closer to the podium. They paid to eat lunch and see Fouts give his address, the complaint further said, and that event was staffed by city employees, including uniformed police and that city workers contributed to the PAC in order to attend the event.

Fouts said his state-of-the-city speech this year also was a fundraiser but that it benefited Macomb County’s Special Olympics fund.

“From now on, this speech will always benefit some charity. So something good came out of this,” he said, adding that Drolet's complaint was "just a distraction from all the good things happening in our city.”

Sabaugh said Wednesday, “The mayor really didn’t know about this. I’m responsible for this speech. And we were very forthright about this. We didn’t hide anything.”